Brian A. Annes* Terry L. Anderson, Water Needn t Be a Fighting Word, The Wall Street Journal, Sept. 30, 1983, at 30.

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1 Case Note WATER LAW Cooperation Abandoned to Allow Hoarding of Water: The Supreme Court Denies Right to Divert Waters Across State Borders Under the Red River Compact; Tarrant Reg l Water Dist. v. Herrmann, 133 S. Ct (2013) Brian A. Annes* Whiskey is for drinking water is for fighting. The fighting will continue as long as water is allocated by politics instead of the market. 1 Introduction Historically, water has caused disputes due to its variable nature and widespread necessity. The Red River between Texas and Oklahoma is no exception. The Red River water rights are distributed between Oklahoma, Texas, Arkansas, and Louisiana according to the Red River Compact (Compact). 2 Hoping to find alternative supply channels for a growing population, the Tarrant Regional Water District (Tarrant), located in Texas, attempted to purchase water from water users in Oklahoma and Arkansas. 3 After these attempts failed, Tarrant applied to the Oklahoma Water Resources Board (OWRB) for a permit to divert water from the Red River basin in Oklahoma. 4 Knowing the OWRB would deny the permit based on Oklahoma state water laws, Tarrant filed suit to enjoin the permit denial. 5 Tarrant argued the Compact allowed the diversion of water in Oklahoma, and certain Oklahoma state laws violated the dormant Commerce Clause. 6 The United States District Court for * J.D. candidate, University of Wyoming College of Law, class of Thanks to Brian Fuller, Julianne Gern, and Lucas Wallace for their wonderful help during the writing process. Also, thanks to Michael Fitzgerald and Grant Smith for their valuable insights. A special thank you to Sam Kalen for his careful editing and guidance. 1 Terry L. Anderson, Water Needn t Be a Fighting Word, The Wall Street Journal, Sept. 30, 1983, at Red River Compact Act of 1980, Pub. L. No , 94 Stat (1980) [hereinafter Red River Compact]. 3 See Tarrant Reg l Water Dist. v. Herrmann, 133 S. Ct. 2120, 2128 (2013). The Dallas-Fort Worth metropolitan area has grown from 5.1 million people to 6.4 million people between 2000 and ; see Okla. Stat. Ann. tit. 82, (A)(3), (A), (B) (2013); Okla. Att y Gen. Op. No (1978).

2 106 Wyoming Law Review Vol. 14 the Western District of Oklahoma granted the OWRB s motion for summary judgment, and the United States Court of Appeals for the Tenth Circuit affirmed. 7 The United States Supreme Court rejected Tarrant s arguments concerning the compact language and the dormant Commerce Clause. 8 The Court affirmed the Tenth Circuit s decision. 9 This Case Note begins with a discussion of interstate water compacts generally and interpretation methods, followed by a discussion of the modern dormant Commerce Clause doctrine. 10 Next, the Case Note outlines the facts and opinion of the Tarrant case. 11 This Case Note argues the Court erred in holding the Compact prohibited cross-border diversions in this situation. 12 It also argues the Oklahoma water law statutes violate the dormant Commerce Clause. 13 The Case Note concludes with how this decision affects Wyoming. 14 Compacts Generally Background Before states entered into water compacts, the United States Supreme Court adjudicated and apportioned use of interstate waters on a case-by-case basis. 15 This method was inefficient because of the time and cost of litigation. 16 The Court, as an expert in law and equity, was not the best option for deciding what parties with firsthand knowledge of the circumstances should determine. 17 The circumstances at the heart of a compact are unique, and the Court conceded such circumstances necessitate expert administration, rather than judicial imposition of a hard and fast rule because of the possibility of future change of conditions. 18 Further, the 7 Tarrant, 133 S. Ct. at See infra notes and accompanying text. 11 See infra notes and accompanying text. 12 See infra notes and accompanying text. 13 See infra notes and accompanying text. 14 See infra notes and accompanying text. 15 See, e.g., Kansas v. Colorado, 206 U.S. 46 (1907) (addressing dispute over diversions of the Arkansas River). 16 John E. Thorson et al., Dividing Western Waters: A Century of Adjudicating Rivers and Streams, Part II, 9 U. Denv. Water L. Rev. 299, 434 (2006). 17 at 104. ( The difficulties incident to litigation have led States to resort, with frequency, to adjustment of their controversies by compact, even where the matter in dispute was the relatively simple one of a boundary. ). 18 Colorado v. Kansas, 320 U.S. 383, 392 (1943).

3 2014 Case Note 107 Court s application of a complex combination of differing state water laws creates uncertainty. 19 In response to such concerns, states began negotiating interstate water compacts before resorting to litigation. 20 An interstate compact is a contract between states enacted into law upon congressional approval. 21 When applied to interstate waterways, like rivers crossing state boundaries, a compact expressly apportions water rights and duties between the signatory states. 22 Such apportionment is necessary to resolve possible conflicts, like an upstream state controlling the waters flowing to other, downstream states. 23 States negotiate to find more equitable solutions to these conflicts. 24 After the states have agreed to a compact, Congress has the option of approving the compact and transforming it into federal law. 25 Compact Interpretation Compacts are contractual agreements between states that can cover a variety of issues. 26 Congress must approve compacts before they become binding as federal law. 27 No general rules exist to resolve compact disputes when they arise, but courts 19 See, e.g., Montana s Exception and Brief, Montana v. Wyoming, (2010) (No. 137), 2010 WL (discussing an ongoing case where two conflicting state water laws are being applied to resolve a dispute between interstate waters). 20 See generally Delph E. Carpenter, Address on the Application of the Reserve Treaty Powers of the States to Interstate Water Controversies (1921), (last visited Nov. 14, 2013). The first interstate water compact was the Colorado River Compact, developed by the states and approved by Congress in Colorado River Compact, 123 Colo. Sess. Laws 684, Colo. Rev. Stat (2013). 21 Black s Law Dictionary 318 (9th ed. 2009); see generally Jerome C. Muys et al., Utton Transboundary Resources Center Model Interstate Water Compact, 47 Nat. Resources J. 17, (Winter 2007) (addressing issues and structure of interstate water compacts). 22 Paul Elliott, Texas Interstate Water Compacts, 17 St. Mary s L.J. 1241, (1986). 23 at ; see, e.g., Upper Colorado River Basin Compact, art. I, 63 Stat. 37 (1949) (stating the purpose of the compact is the equitable division of water use). Consumptive use of water for each state is apportioned under the compact. art. III. 25 U.S. Const. art. I, 10, cl. 3; see also Barton H. Thompson, Jr. et al., Legal Control of Water Resources 894 (5th ed. 2013) (providing an example of Congress refusing to approve a compact agreed to by the states). 26 Charles T. DuMars & Stephen Curtice, Interstate Compacts Establishing State Entitlements to Water: An Essential Part of the Water Planning Process, 64 Okla. L. Rev. 515, 529 (Summer 2012). 27 Texas v. New Mexico, 482 U.S. 124, 128 (1987).

4 108 Wyoming Law Review Vol. 14 have employed principles of contract and statutory interpretation. 28 Specifically, the Supreme Court has dealt with the importance of plain meaning, the structure of the document, and drafting history as they relate to compacts. 29 Because of the contractual nature of compacts, courts analyze the course of dealings. 30 Finally, once compacts become federal statutes, the canon of presumption against waiver of sovereign immunity applies. 31 The first step in interpretation is determining if the plain meaning of the contract is clear. 32 If the plain meaning is clear, such meaning is applied. 33 The Supreme Court in Montana v. Wyoming considered the plain meaning of beneficial use within the Yellowstone River Compact to resolve a dispute. 34 The Court looked at the plain meaning of beneficial use to support holding there was no quantity of water guaranteed to flow from Wyoming to Montana. 35 The Court reasoned that if the states wanted to guarantee a net flow to downstream users, the states could have used explicit language in the compact. 36 If the plain language is ambiguous, the Supreme Court can look to other tools of interpretation to determine the intent of the parties. 37 When determining the intent of the parties in Alabama v. North Carolina, the Court found that, although all contracts have an implied duty of good faith and fair dealing, compacts are more than contracts because Congress adopts compacts. 38 As such, courts should 28 Annotation, Constitutionality, Construction, and Application of Compacts and Statutes Involving Co-operation Between States, art. III, 134 A.L.R. Fed (1941); Texas v. New Mexico, 482 U.S. 124 (1987) (contract law interpretation); Alabama v. North Carolina, 130 S. Ct (2010) (statutory interpretation); see generally Ferdinand S. Tinio, Comment, The Parol Evidence Rule and Admissibility of Extrinsic Evidence to Establish and Clarify Ambiguity in Written Contract, 40 A.L.R. 3d 1384 (1971) (contract interpretation methods); 82 C.J.S. Statutes 410 (statutory interpretation). 29 See infra notes and accompanying text. 30 See, e.g., Texas v. New Mexico, 482 U.S. at 128 (contract principles). 31 See, e.g., Alabama v. North Carolina, 130 S. Ct. 2295, 2307 (2010) (statutory canons). 32 Montana v. Wyoming, 131 S. Ct. 1765, 1778 (2011) at at at (using the Colorado River Compact, 42 Stat. 171 (1922), as an example of establishing minimum flows to downstream users); see Joe Norris, Montana v. Wyoming: Is Water Conservation Drowning the Yellowstone River Compact? 15 U. Denv. Water L. Rev. 189, 197 (Fall 2011); Shiran Zohar, A Deal is a Deal in the West, or is it? Montana v. Wyoming and the Yellowstone River Compact, 6 Duke J. Const. L. & Pub. Pol y Sidebar 160, (Mar. 8, 2011). 37 Alabama v. North Carolina, 130 S. Ct. 2295, 2309 (2010); see also K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291 (1988). 38 Alabama, 130 S. Ct. at The compact was an agreement between states concerning radioactive waste management procedures.

5 2014 Case Note 109 not add terms, or else they risk overstepping their judicial role. 39 This is the basis of the omitted-case canon. 40 When language appears in a provision of the statute, but is omitted elsewhere, the omission is considered intentional. 41 The Supreme Court has also looked at the drafting history of compacts when determining the intent of the parties. 42 In Oklahoma v. New Mexico, the Court focused on the congressional adoption of compacts, rather than their contractual nature, when interpreting the Canadian River Compact as it related to water storage. 43 When interpreting interstate compacts under the rules of statutory interpretation, it is appropriate for courts to use extrinsic evidence, including negotiating history and legislative history, to determine the meaning of the compact language. 44 When considering prior drafts of statutes, language considered and rejected in prior drafts demonstrates intent to omit. 45 Further, intention to leave a term out can be found when a prior draft contains the language, while the final version omits it. 46 Course of dealings analysis could also be an appropriate way to interpret a compact. In Texas v. New Mexico, the Court interpreted the Pecos River Compact to resolve a dispute between the states. 47 The Court commented that the compact, despite congressional adoption, is a contract and must be construed and applied in accordance with its terms. 48 When interpreting contracts, courts may look at the course of dealings as a factor in determining the intent of the parties. 49 When interpreting a contract, prior negotiations and surrounding circumstances may be considered. 50 Therefore, the same analysis may be extended to the interpretation of a compact. 39 at See Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 93 (2012). 41 Russello v. United States, 464 U.S. 16, 23 (1983). 42 Oklahoma v. New Mexico, 501 U.S. 221, (1991). 43 ; see also Oklahoma Historical Society s Encyclopedia of Oklahoma History and Culture, (last visited Sept. 22, 2013) (detailing the Canadian River flows from Colorado through New Mexico, Texas, and Oklahoma). 44 Oklahoma, 501 U.S. at 235 n Crosby v. Nat l Foreign Trade Council, 530 U.S. 363, 378 n.13 (2000). 46 Rowe v. New Hampshire Motor Transp. Ass n, 552 U.S. 364, 374 (2008) U.S. 124, 135 (1987). 48 at Pac. Portland Cement Co. v. Food Mach. & Chem. Corp., 178 F.2d 541, 552 (9th Cir. 1949). 50 ; see also Restatement (First) of Contracts: Rules Aiding Application of Standards of Interpretation 235(d) (1932).

6 110 Wyoming Law Review Vol. 14 The issue of federalism also becomes a factor because compacts are both contracts and statutes, and states execute compacts. 51 In Virginia v. Maryland, the Supreme Court held, [i]f any inference at all is to be drawn from... silence on the subject of regulatory authority, we think it is that each State was left to regulate the activities of her own citizens. 52 Further, in Alaska v. United States, the Court declared when deciding whether waters are navigable, the analysis must begin with a strong presumption against defeat of a State s title. 53 The Court imposes a strong presumption in favor of state sovereignty when there is a conflict between federal and state law, and it will factor the reluctance of states to abandon their sovereign rights into any interpretation analysis. 54 In Tarrant Regional Water District v. Herrmann, the Court applied this interpretive tool to an interstate compact. 55 Dormant Commerce Clause Under the Federal Constitution, the Commerce Clause grants Congress the power of regulation of commerce between the states. 56 States maintain the right to regulate interstate commerce in the interest of public health and safety as long as there is no clear congressional action to the contrary. 57 States are given the power to regulate interstate commerce, but this is not unlimited authority to protect state interests at the expense of other states. 58 The Supreme Court has developed principles to determine whether a state law violates the Commerce Clause. 59 First, the object of the law must be considered interstate commerce. 60 The Court must also look to whether Congress granted power to the state to regulate such commerce. 61 The Court must then determine if the state laws are discriminatory on their face, in their purposes, or in their effects. 62 If discriminatory, the law is invalid unless the state can prove the law 51 Tarrant Reg l Water Dist. v. Herrmann, 133 S. Ct. 2120, (2013) U.S. 56, 67 (2003) U.S. 1, 34 (1997). 54 Tarrant, 133 S. Ct. at at U.S. Const. art. I, 8, cl S. Pac. Co. v. Arizona, 325 U.S. 761, 766 (1945). 58 See City of Philadelphia v. New Jersey, 437 U.S. 617, 624, (1978). 59 C & A Carbone, Inc. v. Town of Clarkstown, N.Y., 511 U.S. 383, 401 (1994) (O Connor, J., concurring). 60 Gibbons v. Ogden, 22 U.S. 1, 9 10 (1824). 61 Gregory v. Ashcroft, 501 U.S. 452, (1991); Wyoming v. Oklahoma, 502 U.S. 437, 458 (1992). 62 See Hughes v. Oklahoma, 441 U.S. 322, 336 (1979).

7 2014 Case Note 111 serves a legitimate local purpose and this purpose could not be served as well by available nondiscriminatory means. 63 The Court will apply strict scrutiny to this analysis if the law is found to be discriminatory. 64 Specifically, the United States District Court for the Western District of Texas has dealt with cross-border water issues under the dormant Commerce Clause. In City of Altus v. Carr, the district court dealt with a similar issue to the Tarrant case. 65 Altus, Oklahoma was an expanding urban center in need of water. 66 The city bought rights to groundwater from Texas water users. 67 In response, Texas passed a statute forbidding the transfer of groundwater rights to out-of-state users. 68 The district court overruled the statute because it violated the Commerce Clause; thus, the water was able to cross state lines to where it was needed. 69 Specifically, the groundwater once pumped became private property, and any attempt to deny the sale of such property across state lines violated the Commerce Clause. 70 In another case, Sporhase v. Nebraska ex rel. Douglas, the state of Nebraska filed suit to enjoin water users in Colorado from using Nebraska groundwater without a permit. 71 The Supreme Court first held groundwater was an instrument of commerce. 72 The Court noted eighty percent of the water supply was used for agriculture, which is an interstate enterprise, and the boundaries of groundwater aquifers, like the Ogallala, cover multiple states. 73 After concluding that water is an article of commerce, the Court looked at whether the requirement of reciprocity for transfers of water across state lines violated the dormant Commerce 63 Maine v. Taylor, 477 U.S. 131, 138 (1986) F. Supp. 828 (W.D. Tex.), summarily aff d, 385 U.S. 35 (1966). 66 at at at at Sporhase v. Nebraska ex rel. Douglas, 458 U.S. 941 (1982); see also Douglas L. Grant, Commerce Clause Limits on State Regulation of Interstate Water Export, lib.siu.edu/cgi/viewcontent.cgi?article=1310&context=jcwre (last visited Oct. 19, 2013) (discussing Sporhase). 72 Sporhase, 458 U.S. at at

8 112 Wyoming Law Review Vol. 14 Clause. 74 The state satisfied the purpose prong by showing that conservation of groundwater in an area with inadequate present supply to meet its demand was a legitimate purpose. 75 However, the Court found such conservation could be achieved through restrictions on in-state users, and the restrictions would not be discriminatory to out-of-state parties. 76 Because there was a nondiscriminatory alternative to achieve the public policy, the statute was in violation of the dormant Commerce Clause. 77 Red River Compact Principal Case Oklahoma, Texas, Arkansas, and Louisiana drafted the Red River Compact following more than twenty years of negotiations. 78 Congress approved the Compact in The Compact allocates water resources between the states located in the Red River basin. 80 The Compact divides the basin into five reaches and multiple subbasins within the reaches. 81 In Reach II, the Compact created five subbasins. 82 Reach II, subbasin 5 encompasses parts of Texas, Oklahoma, 74 at at at at Oklahoma Water Resource Board, Red River Compact Commission, ok.gov/rrccommission/rrccommission.html (last visited Nov. 11, 2013). 79 Red River Compact, supra note 2, The Red River basin covers a large portion of Texas, Oklahoma, Arkansas, and Louisiana. The river starts near the border of Texas and New Mexico, defines part of the border between Texas and Oklahoma, and eventually flows into the Mississippi River, to be released into the Gulf of Mexico. See Tarrant Reg l Water Dist. v. Herrmann, 133 S. Ct. 2120, 2136 (2013) (showing a map of the entire basin). 81 Red River Compact, supra note 2, 2.12, , , , Natural boundaries like river basins are efficient ways to implement water resources. See Know Your Basin?, Wyoming State Engineer s Office, (last visited Nov. 2, 2013) (providing a list and map of the major basins in Wyoming). A reach is a continuous extent of land or water. New Oxford American Dictionary, 1450 (3d ed. 2010). A basin is a tract of country that is drained by a river and lakes. at 137. Reach, basin, and subbasin are used in the Compact to delineate subdivisions of the watershed. 82 Red River Compact, supra note 2,

9 2014 Case Note 113 and Arkansas, and preserves a minimum flow to Louisiana. 83 Regarding Reach II, subbasin 5, the Compact assigns equal rights to the use of runoff originating in subbasin 5 and undesignated water flowing into subbasin 5 if at least 3,000 cubic feet per second (cfs) are flowing down the Red River at the Louisiana- Arkansas border. 84 This language requires the other three states to guarantee that a minimum flow of water reaches Louisiana. 85 The Compact also provides for enforcement in the form of accounting. 86 Although the Compact did not specify a method of accounting, a general accounting typically includes a determination of supply and diversion in each state. 87 The drafters saw a routine requirement of accounting for all the water in the basin financially burdensome, but wanted to provide a method of seeking equity within the Compact. 88 Accounting over such a large area can be expensive, 83 ; see also The Oklahoma Water Resources Board, available at util/legal.php (map of Reach II, reprinted with permission below). 84 Red River Compact, supra note 2, ; see Grant Harse, Nebraska s Costs of Compliance with the Republican River Compact: An Equitable Solution, 19-FALL Kan. J.L. 7 Pub. Pol y 124, 131 (Fall 2009) (discussing issues concerning accounting in compacts and defines accounting procedures to determine supply, allocations, use and compliance with the [c]ompact.... ). 87 Red River Compact, supra note 2, 2.11; Harse, supra note 86, at Tarrant Reg l Water Dist. v. Herrmann, 133 S. Ct. 2120, 2127 (2013).

10 114 Wyoming Law Review Vol. 14 time-consuming, and uncertain in outcome. 89 Although a state may request an accounting at any time, no state has ever made such a request in the history of the Compact. 90 Other important portions of the Compact explicitly address possible conflicts between the Compact and state water law. The relevant language provides: Each Signatory State may use the water allocated to it by this Compact in any manner deemed beneficial by that state. Each state may freely administer water rights and uses in accordance with the laws of that state, but such uses shall be subject to the availability of water in accordance with the apportionments made by this Compact. 91 Elsewhere, language discusses the limitations of the Compact: Nothing in this Compact shall be deemed to... [i]nterfere with or impair the right or power of any Signatory State to regulate within its boundaries the appropriation, use, and control of water, or quality of water, not inconsistent with its obligations under this Compact. 92 While Tarrant focused on the qualifiers of the language above, the OWRB focused on the language dealing with regulation within state boundaries. 93 The dispute at issue arose from these sections of the Compact. Factual Background The Tarrant Regional Water District provides water to north-central Texas. 94 In looking to meet the short-term and long-term demands of its expanding population, Tarrant attempted to secure water through purchase from other states. 95 After these attempts failed, it applied for a permit from the OWRB to divert water to Texas from a point in Oklahoma within Reach II, subbasin 5 89 Harse, supra note 86, at 138, Red River Compact, supra note 2, 2.11; Tarrant, 133 S. Ct. at Red River Compact, supra note 2, See infra notes and accompanying text. 94 Tarrant, 133 S. Ct. at The Tarrant Regional Water District lies outside the Red River basin, but this was not addressed in the litigation that focused on the rights of the states. at App. B. Although the Compact is silent on whether out-of-basin use is permitted, other compacts expressly limit water rights within the basin. See, e.g., Yellowstone River Compact, 2, 65 Stat. 663 (1951). 95 Tarrant, 133 S. Ct. at 2128.

11 2014 Case Note 115 of the Compact. 96 Anticipating that OWRB would deny the permit based on Oklahoma law, Tarrant filed suit to enjoin the OWRB s likely denial of Tarrant s application. 97 Tarrant claimed the Compact allowed for cross-border diversions within Reach II, subbasin 5, and the Oklahoma statutes violated the dormant Commerce Clause by discriminating against out-of-state applicants. 98 The United States District Court for the District of Western Oklahoma granted summary judgment in favor of the OWRB, and the United States Court of Appeals for the Tenth Circuit affirmed. 99 Court s Opinion The Supreme Court held the Compact did not allow cross-border diversions of water within Reach II, subbasin 5, and the dormant Commerce Clause was not violated because all the water in Reach II, subbasin 5 was appropriated. 100 The Court first acknowledged that compacts should be interpreted through principles of contract law. 101 Looking at the plain language of section 5.05 of the Compact, the Court disagreed with Tarrant and viewed the absence of a qualifier like equal rights within their state as an indication of ambiguity, requiring further interpretive tools to determine the intended meaning. 102 Tarrant argued the plain meaning and four corners of the Compact allowed Texas to cross state lines to obtain its share of excess water. 103 Using interpretive tools, the Court rejected these arguments regarding the plain meaning of the Compact and four corners analysis. 104 Based on its determination that, at a minimum, silence can only be considered ambiguous, the Court relied heavily on a state s general reluctance to abandon sovereign powers. 105 The Court also utilized the standards of other compacts and course of performance under the Compact between the states to reach its holding Tarrant applied for a permit to divert a total of 310,000 acre-feet per year from the Kiamichi. Average annual flow of the Kiamichi between 1950 and 2007 was about 2.87 million acre-feet per year. OWRB, Oklahoma Comprehensive Water Plan Physical Water Supply Availability Report, Table 4-3 (2011), WaterPlanUpdate/OCWP_PhysicalWaterSupplyAvailabilityReport.pdf (last visited Nov. 23, 2013). 97 Tarrant, 133 S. Ct. at at Tarrant Reg l Water Dist. v. Herrmann, 656 F.3d 1222 (10th Cir. 2011). 100 Tarrant, 133 S. Ct. at at at Brief for Petitioner at 26, Tarrant Reg l Water Dist. v. Herrmann 133 S. Ct (2013) (No ), 2013 WL [hereinafter Brief for Petitioner]. 104 Tarrant, 133 S. Ct. at at The Court s determination that silence is ambiguous conflicts with the omitted-case canon. See, e.g., Alabama v. North Carolina, 130 S. Ct. 2295, (2010). 106 Tarrant, 133 S. Ct. at

12 116 Wyoming Law Review Vol. 14 In interpreting the Compact, the Court held that a state s reluctance to give up sovereign power should be one of the most important factors to consider. 107 The Court found there is a strong presumption in favor of state ownership of the waters of the basin by relying on prior cases that states held vested rights to their navigable waters. 108 From these cases, the Court further conveyed, [i]f any inference at all be drawn from [such] silence on the subject of regulatory authority, we think it is that each State was left to regulate the activities of her own citizens. 109 Therefore, the Court held it was unlikely the states intended to hand over their sovereign rights through silence. 110 After making a strong presumption against surrendering sovereign powers, the Court looked at customary practices in other compacts. 111 Relying on compacts like the Snake River Compact and the Upper Colorado River Basin Compact, the Court determined standard practice for permitting diversions across state lines is to expressly declare such cross-border diversion rights in the agreements. 112 The Court also considered other compacts that provided specifically how such crossborder agreements would be managed. 113 With this support, the Court held that explicit language regarding the cross-border rights and specific language on the implementation are standard in other compacts, and silence here was insufficient evidence of intent in this case to create a cross-border diversion right. 114 Next, the Court looked at the course of performance of the parties. 115 It noted this was the first instance of an entity attempting to assert cross-border diversion rights under section 5.05 since Congress officially adopted the Compact in Tarrant s behavior when attempting to purchase water rights prior to 107 at ; see also Martin v. Lessee of Waddell, 41 U.S. 367, 410 (1842) (navigable waters); United States v. Alaska, 521 U.S. 1, 5 (1997) (power to control waters); Alaska, 521 U.S. at 34 (1997) (presumption). The Court does not address whether or not the Red River is navigable, but only cites cases involving navigable waters in its sovereignty analysis. Tarrant, 133 S. Ct. at 2132; see generally PPL Montana, LLC v. Montana, 132 S. Ct. 1215, (2012) (defining navigable ). 109 Tarrant, 133 S. Ct. at 2132 (quoting Virginia v. Maryland, 540 U.S. 56, 67 (2003)). 110 at at ; see Brief for Respondents at 30 n.10, Tarrant Reg l Water Dist. v. Herrmann 133 S. Ct (2013) (No ), 2013 WL [hereinafter Brief for Respondents] (listing compacts with explicit language granting cross-border access). 113 Tarrant, 133 S. Ct. at 2134; see also Kansas-Nebraska Big Blue River Compact, art. VII(1), 86 Stat. 198 (defining which parties can assert rights); Belle Fourche River Compact, art. VI, 58 Stat (determining who bears the costs of diversions); Arkansas River Basin Compact, Kansas-Oklahoma, art. VII(A), 80 Stat (implementing administration of diversions). 114 Tarrant, 133 S. Ct. at at

13 2014 Case Note 117 the attempt to assert its right under the Compact was also significant in holding the OWRB s interpretation to be more consistent with the drafters intent. 117 The Court also rejected Tarrant s argument that the Compact itself allowed Tarrant to divert water from Oklahoma. 118 Tarrant argued the location of boundaries between subbasins within Reach II indicated that subbasin 5 contained surplus water that no state intended to use. 119 Subbasins 1 through 4 could be dammed to provide unlimited water to each of the states, therefore, anything flowing into subbasin 5 was excess. 120 Access to the surplus was only limited by capping each state s share at twenty-five percent of the excess water in subbasin Further, because the subbasin contained waters the states did not intend to use, there would be no detriment to cross-border diversions. 122 The Court was not persuaded by this argument, and looked at section 5.05 of the Compact where the language is not only equal rights to water flowing into subbasin 5, but also runoff originating in subbasin Therefore, the Court concluded subbasin 5 did not exclusively consist of excess water. 124 Tarrant also argued equal rights meant each state was guaranteed twentyfive percent of the excess water in subbasin The OWRB argued the language of section 5.05 assigns a cap of twenty-five percent on the right to access water in the subbasin, but the states are not guaranteed the full twenty-five percent. 126 Further, Tarrant argued the amount of excess water within each state was not equal to twenty-five percent of the total excess water within Reach II, subbasin Specifically, Tarrant claimed more than twenty-five percent of the water was in Oklahoma. 128 Tarrant argued more than twenty-five percent of the freshwater was in Oklahoma and only sixteen percent was located in Texas. 129 This was inconsistent with the OWRB calculations placing at least twenty-nine at at This assumes flow at the Arkansas-Louisiana border is at least 3,000 cfs. See Red River Compact, supra note 2, Tarrant, 133 S. Ct. at at Brief for Respondents, supra note 112, at Tarrant, 133 S. Ct. at ; see also Brief for Petitioner, supra note 103, at 9 n.5 (discussing relevant details of the 1970 report).

14 118 Wyoming Law Review Vol. 14 percent of the water in the subbasin within Texas. 130 Ultimately, the Court did not have to decide which calculations were accurate, and held the equal rights referred only to a limit of twenty-five percent instead of a guarantee. 131 The Court maintained if Texas believed Oklahoma was using more than twenty-five percent, it could request an accounting pursuant to section 2.11 of the Compact. 132 The Court also disagreed with Tarrant s alternative argument that the Oklahoma water laws violated the dormant Commerce Clause. The Court found all the waters within Reach II, subbasin 5 were allocated; therefore, Oklahoma statutes did not apply to interstate waters. 133 For the dormant Commerce Clause to apply, there has to be interstate commerce. 134 In this case, the Court found the Compact appropriated all water within the Red River basin. 135 Because all the water within the basin was appropriated, the Court found there was no interstate commerce. 136 The Compact assumes each state only uses its allocated twenty-five percent of the excess unless accounting demonstrates otherwise. 137 The Court found the Compact governs all interstate waters in the basin, and the Oklahoma statutes cannot discriminate against any interstate commerce because there is no interstate commerce to regulate. 138 Ultimately, the Court held Oklahoma water statutes did not violate the dormant Commerce Clause doctrine. 139 Analysis The United States Supreme Court erred in its decision. First, Tarrant s interpretation of the Compact was correct; the Court should have placed more weight on the structure of the Compact, course of dealings, and prior draft history. 140 Proper interpretation of the Compact would not have resulted in involuntary abandonment of state sovereign powers. 141 Second, contrary to the Court s conclusion, there was unappropriated water under the Compact, and Oklahoma s discriminatory state laws violated the dormant Commerce Clause Tarrant, 133 S. Ct. at 2136; see also Brief for Respondents, supra note 112, at 26, 47 48, & n.17 (discussing the twenty-nine percent calculation and pitfalls of the Tarrant report). 131 Tarrant, 133 S. Ct. at at See infra notes and accompanying text. 141 See infra notes and accompanying text. 142 See infra notes and accompanying text.

15 2014 Case Note 119 Finally, this decision will have far reaching effects on Wyoming s interstate water compacts. 143 Compact Interpretation Contrary to the Supreme Court s conclusion, the Compact s plain meaning permits Tarrant to divert water in Oklahoma. 144 If a court finds the plain meaning ambiguous, it can use interpretive rules. 145 When interpreting the Compact, more weight should be given to the structure of the Compact as a whole, the drafting history, and the course of dealings of the parties. 146 Because the Compact is a statute, state sovereignty should be a factor. 147 But the Court erred in deciding the states did not abrogate their sovereignty. 148 Finally, the policy behind water law strongly favors permitting Tarrant s proposed cross-border diversion. 149 The Supreme Court views compacts between states as contracts Congress approves and requires interpretation through principles of contract law and statutory canons. 150 Both interpretation methods first focus on the unambiguous, plain meaning of the language in dispute. 151 If the plain meaning of the compact is clear, that is the interpretation that should be used. 152 The first distinction that must be made is whether the equal rights language in section 2.01 of the Compact refers to a right to water up to a maximum of twenty-five percent or a guaranteed entitlement to twenty-five percent of the excess in Reach II, subbasin The plain meaning of a right is a legally enforceable claim or legal guarantee of an interest. 154 The use of the term right within the Compact is not a mere opportunity to divert excess water. 155 Rather, right in 143 See infra notes and accompanying text. 144 See infra notes and accompanying text. 145 See infra note 157 and accompanying text. 146 See infra notes and accompanying text. 147 See infra notes and accompanying text See infra notes and accompanying text. 150 Texas v. New Mexico, 482 U.S. 124, 128 (1987) (contract principles); Alabama v. North Carolina, 130 S. Ct. 2295, 2312 (2010) (statutory canons). 151 Montana v. Wyoming, 131 S. Ct. 1765, 1778 (2011) (discussing contract principles); Alabama, 130 S. Ct. at 2306 (exemplifying statutory use of plain meaning of sanctions in the compact). 152 See Montana, 131 S. Ct. at 1778 (addressing the plain meaning of beneficial uses in the Yellowstone River Compact). 153 See Red River Compact, supra note 91, Black s Law Dictionary 1436 (9th ed. 2009). 155 See Red River Compact, supra note 83, 5.05.

16 120 Wyoming Law Review Vol. 14 the Compact is a guaranteed entitlement for the states in the Compact to use twenty-five percent of the excess in subbasin 5 of Reach II when the Red River s flow at the Arkansas-Louisiana border is at least 3,000 cfs. 156 The plain meaning of equal rights guarantees all the states twenty-five percent of the surplus of Reach II, subbasin 5. The next issue is how the states satisfy this guarantee, and if they can do so by cross-border diversions. Tarrant has a right to divert water in Oklahoma to fulfill their guaranteed rights under the Compact because the structure of the Compact allows it. The Supreme Court looks at the structure of statutes to resolve interpretation ambiguities. 157 In the Compact, specific qualifiers were used in other sections of the Compact but left out of the language regarding Reach II, subbasin For example, the Compact describes states as having free and unrestricted use of the water of this subbasin within their respective states, with respect to Reach II, subbasin Also, in section 6.03, which governs Reach III, Texas and Louisiana within their respective boundaries shall each have the unrestricted use of the water of this subbasin. 160 When a term is used in another provision, the court assumes omissions elsewhere are intentional. 161 Because the Court is reluctant to write language into compacts, and the Compact drafters specified elsewhere that unrestricted uses within subbasins were restricted within state boundaries, it is clear the drafters intended Reach II, subbasin 5 to be a borderless basin with equal access for all states. 162 The Compact contemplated in some sections that states are limited to use waters within their boundaries. 163 In the section concerning Reach II, subbasin 5, that language is absent, demonstrating the parties did not contemplate the waters of Reach II, subbasin 5 to be limited within the state boundaries. 164 This distinction demonstrates the intent of the parties because the Court is reluctant to add terms to contracts Russello v. United States, 464 U.S. 16, (1983). 158 Compare Red River Compact, supra note 2, at 5.03(b) & 6.03 (qualitative language present), with Red River Compact, supra note 2, at 5.05; see generally Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 93 (2012) ( The principle that a matter not covered is not covered is so obvious that it seems absurd to recite it. ). 159 Red River Compact, supra note 2, 5.03(b) (emphasis added) (b) (emphasis added). 161 Russello, 464 U.S. at 23 (1983). 162 See Alabama v. North Carolina, 130 S. Ct. 2295, (2010) ( We are especially reluctant to read absent terms into an interstate compact given the federalism and separation-ofpowers concerns that would arise were we to rewrite an agreement among sovereign States, to which the political branches consented. ). 163 See supra notes and accompanying text. 164 See Red River Compact, supra note 2, See supra note 162 and accompanying text.

17 2014 Case Note 121 The drafting history of the Compact also supports the argument Reach II, subbasin 5 was intended to be a borderless pool for all states. When courts interpret compacts, they carefully consider the parties intent. 166 Further, the negotiation history must be looked at when interpreting ambiguous language, and previous drafts and the circumstances surrounding the current language are aids to find the drafters intent. 167 In Tarrant, both parties used the previous drafts as support for their positions, but the drafting history supports the conclusion the drafters specifically intended to create a basin without restricting access for each state within their respective boundaries. 168 An early draft of the Compact in 1966 contained specific language referring to state power within their boundaries. 169 This language referred to explicit boundaries within Reach II, as applied to unassigned waters, which would become excess water (subbasin 5) in future drafts. 170 The 1972 draft required that the states would have free and unrestricted use of the waters of this subbasin [5]. 171 The language of that draft still contained limits to the state boundaries as found in the 1966 draft. 172 However, in 1976, the drafters deleted the language within their boundaries, and in their respective states with regards to Reach II, subbasin But the drafters kept that language elsewhere in the Compact. 174 States had free use of the waters of subbasin 5 with the restrictions of minimum flow requirements at the Arkansas-Louisiana border, and the twentyfive percent guarantee. 175 The OWRB argued the language free and unrestricted use implies a limitation to state boundaries. 176 It claimed the use among the multiple states could not be so broad without restricting the states to their respective areas. 177 But, the twenty-five percent guarantee acts as a limit to the states use within the subbasin, just like a restriction to use within each state s respective boundary 166 Montana v. Wyoming, 131 S. Ct. 1765, 1771 n.4 (2011). 167 Oklahoma v. New Mexico, 501 U.S. 221, 235 n.5 (1991) (negotiation history); Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 542 (2001) (previous drafts). 168 See Brief for Petitioner, supra note 103, at 41 43; Brief for Respondents, supra note 112, at See Brief for Petitioner, supra note 103, at 42 (discussing the precise language and location of such language in the 1966 draft) Brief for Respondents, supra note 112, at at at

18 122 Wyoming Law Review Vol. 14 would. 178 Thus, there was no need for the implied state boundary limitations under the Compact to protect against abuse. Significantly, prior drafts had language specifically limiting the right to access water under the Compact to state boundaries, and the drafters abandoned that language in the final version. 179 If compact drafters consider and reject language, such actions demonstrate intent not to include such language in the final version. 180 State boundary limitations remained elsewhere in the Compact, but were omitted in the section describing Reach II, subbasin By changing the language, the parties to the Compact contemplated states could make interstate diversions from Reach II, subbasin 5. The course of dealings under the Compact also demonstrate the Compact allows cross-border diversions. The Supreme Court found it important that no state sought cross-border diversions within Reach II, subbasin 5 until the current case. 182 The Court failed to recognize that a need for such cross-border diversions did not previously arise. 183 More importantly, the Court should have relied on the parties course of dealings during the negotiations. 184 While the Red River Compact negotiations were proceeding in the 1950s and 1960s, Oklahoma sought federal funding for dam projects along the Kiamichi River, which is in Reach II, subbasin There was not enough demand in Oklahoma for the projects to be approved, so the Oklahoma Legislature subsequently included demand from north Texas in their analysis, including from the Tarrant Water District; this resulted in a feasible project that Congress approved. 186 Under the Compact, the water storage created by the projects would be available for unlimited, exclusive use within subbasin 1, which is entirely within Oklahoma See Red River Compact, supra note 2, 5.05 (stating the twenty-five percent guarantee language). 179 See supra notes and accompanying text. 180 Rowe v. New Hampshire Motor Transp. Ass n, 552 U.S. 364, 374 (2008) (upholding specific intent to leave out the term economic found in earlier drafts, but omitted in the final version); Crosby v. Nat l Foreign Trade Council, 530 U.S. 363, 378 n.13 (2000) (finding that Congress, in drafting legislation considered and rejected specific language was indicative of intent to purposely leave out in the final version). 181 See Red River Compact, supra note 2, 5.03(b) & 6.03(b). 182 Tarrant, 133 S. Ct. at See, e.g., Bureau of Reclamation, Colorado River Basin Water Supply and Demand Study, SR-34 (2012) (describing climate change trends of decreased supply and increased demand). 184 Pac. Portland Cement Co. v. Food Mach. & Chem. Corp., 178 F.2d 541, 552 (9th Cir. 1949) (noting that prior negotiations and surrounding circumstances may be considered when trying to determine the meaning of words used in a contract). 185 Brief for Petitioner, supra note 103, at 45 (citing S. Doc. No. 145, Report of the District Engineer, 87th Cong. (Sept. 24, 1962)). 186 ; Flood Control Act of 1962, Pub. L. No , tit. II, 76 Stat (1962). 187 Red River Compact, supra note 2, 5.01.

19 2014 Case Note 123 It is unreasonable that Congress would approve such a project on the premise that waters would be available to Texas and then approve a compact preventing Texas from accessing those waters. 188 The only fair interpretation is that, within Reach II, subbasin 1, waters were for Oklahoma s unlimited use, but any unused, excessive water would flow into subbasin 5, where Texas would have access to such waters under the Compact with the flow restrictions and percentage allocation provided in section Any other interpretation would allow Oklahoma to hoard water because the projects created a surplus supply in Oklahoma. 190 If Oklahoma or any other state would be allowed to hoard water, the only remedy would be an accounting. 191 To date, no state has sought an accounting due to the time, cost, and uncertainty in implementation. 192 The Supreme Court also erred in its analysis of the relinquishment of state sovereignty because the states voluntarily surrendered their sovereignty in the Compact. The Court held allowing states to divert water across state boundaries would violate the strong presumption of states retaining their sovereignty. 193 Although state sovereignty is an important factor, the Court put the most weight on this factor and failed to see how the states voluntarily ceded their sovereign power when they agreed to the Compact. 194 The Compact language provides that [e]ach state may freely administer water rights and uses in accordance with the laws of that state, which demonstrates intent to retain state sovereign power. 195 Section 2.01 continues and states such uses shall be subject to the availability of water in accordance with the apportionments made by this Compact. 196 Further, section 2.10 discusses the inability of the Compact to interfere with state rights regarding use and control of their waters. 197 But this is only as long as such actions are consistent with the states obligations under the Compact. 198 The states freely negotiated and approved the Compact, which contains explicit language limiting their powers. 199 The states specifically allowed the Compact to preempt their own 188 Although Congress does not have to contemplate all circumstances before approving a compact, Congress has rejected proposed compacts before because of the circumstances. See supra note 31 and accompanying text. 189 See Red River Compact, supra note 2, Brief for Petitioner, supra note 103, at Red River Compact, supra note 2, 2.11; Thorson, supra note 16, at 434 (discussing the difficulties associated with an accounting). 192 See supra notes and accompanying text. 193 Tarrant Reg l Water Dist. v. Herrmann, 133 S. Ct. 2120, (2013). 194 at Red River Compact, supra note 2, See supra notes and accompanying text.

20 124 Wyoming Law Review Vol. 14 water laws. 200 Therefore, their sovereign power was not involuntarily limited, and the Court should not have weighed this factor as heavily. Finally, policy demands Tarrant be able to divert water in Oklahoma for its immediate use. 201 Temperature and precipitation trends make cooperation between states important to make sure water gets to where it is needed. 202 In a Bureau of Reclamation study for the nearby Colorado River basin, a recent analysis suggests a deficit of 3.2 million acre-feet (maf) between supply and demand for basin water by This is equal to roughly ten trillion gallons. 204 With demand increasing in metropolitan areas like Dallas-Fort Worth, and supply becoming less stable, states need to cooperate to make sure water goes to where it is most needed. 205 Both Oklahoma and Arkansas rejected Tarrant s attempts to purchase water, and now Oklahoma is attempting to hoard excess water while an expanding population to the south is looking for more water to meet its needs. 206 This is especially important because water is a unique resource that represents the basis of life on Earth and the foundation of all civilizations. 207 Further, Oklahoma is a hybrid state, meaning it acknowledges both prior appropriation and riparian doctrines in regard to surface water rights. 208 Although it still recognizes riparian rights, the state has sought to limit such rights in favor of the trend of western states towards prior appropriation. 209 With foundations in mining law, prior appropriation was developed to put water to use to populate and produce economic prosperity in the West. 210 With this policy, the two 200 [V]ia the supremacy clause, a state s compact obligations can be enforced under federal authority, taking precedence over inconsistent state law. Thompson, supra note 25, at See infra notes and accompanying text. 202 Bureau of Reclamation, Colorado River Basin Water Supply and Demand Study, Study Report, SR-34 (2012), Study%20Report/CRBS_Study_Report_FINAL.pdf (last visited Nov. 15, 2013) One acre-foot is equivalent to 325,851 gallons. Thomas V. Cech, Principles of Water Resources, Appendix (3d ed. 2010). 205 See supra note 3 and accompanying text (stating that Dallas is growing); supra notes and accompanying text (describing that supply is variable). 206 See Tarrant Reg l Water Dist. v. Herrmann, 133 S. Ct. 2120, 2128 (2013) (describing how Tarrant s customer base is expanding). 207 Thomas V. Cech, Principles of Water Resources 1 (3d ed. 2010). 208 Franco-American Charolaise, Ltd. v. Oklahoma Water Res. Bd., 855 P.2d 568, 571 (Okla. 1990). For basic doctrine elements compare A. Dan Tarlock, The Future of Prior Appropriation in the New West, 41 Nat. Resources J. 769 (Fall 2001) (prior appropriation), with 65 C.J.S. Navigable Waters 93 (2013) (riparian rights). 209 See Thompson, supra note 25, at (legislature attempting to limit unused riparian rights and dispute between two types of users is resolved by seniority of right). 210 See Charles F. Wilkinson, Crossing the Next Meridian: Land, Water, and the Future of the West (1992).